Spain Homes ® created a guidebook on retiring in Spain, from costs of living, income requirements to pensioner benefits.
Spain offers a few of the contributing factors, such as:
- A laid-back lifestyle in a temperate climate
- Plenty of sunshine and natural vitamin D
- Health benefits of a Mediterranean diet
- Luxury life at reasonable prices
- Sandy beaches and scenic beauties
All help you live long into retirement in Spain.
Living in Spain is very nice in itself. You can enjoy the same comfortable life when you retire. According to researchers, the number of people who think this way is not small at all.
The latest figures from the Spanish National Statistics Institute (INE) say that more than 8.6 million people in the country are over 65. It includes 16,000 centenarians (+100 years of age) and approximately 380,000 British citizens who retired in Spain.
When you decide to move to Spain for retirement, there are many places to live, such as Costa Blanca. You can read What is the Most Beautiful City in Spain? for the best cities to retire in Spain.
Early Retirement in Spain
If you have sufficient budget and financial resources, you do not need to wait for the general retirement age of 65. Spain has one of the lowest living costs in Europe. Your Dollar or Pound/Sterling stretches much further here. This means that you can retire earlier in Spain.
The cost of living in Spain is also cheaper than in the USA, Australia, UK, and most EU countries.
Housing prices are also more reasonable. Rental prices in Malaga are 64.34% cheaper than in London and 74.20% cheaper than in New York. According to Numbeo, the world’s largest cost of living comparison database, Malaga is 55.60% more affordable than Sydney, Australia.
It is cheaper in southern Spain, compared to many major western capitals. But, how much money do you need to retire in Spain?
Income Requirements to Retire in Spain
You must meet the income requirements to retire in Spain. You show a source of income as proof that you can make a living without looking for a job.
The income value is determined by Spanish immigration and changes every year. It is adjusted for an index that takes into account living costs and inflation.
The Spanish government uses an economic indicator called "IPREM". It describes the number of sufficient funds you need to live comfortably in Spain. It qualifies for your residency in Spain on retirement.
The IPREM value is set at 400% of the available funds in your bank account in 2022. This amount is required for each calendar year. It is equivalent to €2,320 income (or €27.792.96 in savings) per month.
Generally speaking, you need to provide proof of monthly income of at least €2,320. Also, you need to show that you earn an additional €579.02 per month for each dependent on your visa application.
Instead, showing a savings of €27.792.96 for each annual renewal period would be sufficient to retire in Spain. The more income you show, the more likely your application will be successful.
When you apply for a residency visa, it is best to check the latest IPREM rates and visa requirements.
Your source of income can be your savings, regular pension, investment returns (such as rental income or company dividends), etc.
What Benefits do Pensioners Get in Spain?
If you want to benefit from Spain's minimum state pension, you must have paid social security contributions for at least 15 years. Contributions must be paid for 37 years to receive Spain's full pension.
If you already have a pension in your home country and you want to transfer it to Spain, check if your country has an agreement with Spain for pension transfers.
It is the Qualifying Recognised Overseas Pension Scheme (QROPS). It allows the international transfer of your pension outside of the UK tax regime. So you do not pay UK tax at the source.
Note that when you are a taxpayer in Spain, retirement income in Spain is taxed similarly to employment income.
QROPS allows you to choose to have your pension in Euros. You can avoid exchange rate fluctuations and fees.
As always, you should consult a professional financial planner or tax advisor about transferring your pension to Spain.
Retiring in Spain after Brexit
UK citizens can retire in Spain after Brexit. If you are considering retiring in Spain and you are a UK citizen, you can be among the thousands of non-EU citizens who retired to Spain long before Brexit came about.
There are some procedures you should follow to apply for residency in Spain like other non-EU nationals. For more details, you can check out the article Can I Retire to Spain after Brexit?.
Looking For Retirement Property for Sale in Spain?
Spain Homes ® is a local real estate agency. Our professionals listen to your expectations and find the perfect home for your retirement. We also assist you with some of the formalities required to retire in Spain.
Contact our professional team for more information to retire in Spain and the requirements.